Sydney, Aug 7: If you are thinking of migrating to Australia for a better life, think again.
The latest data from the Australia Bureau of Statistics (ABS) reveals that all household types recorded an increase in quarterly living costs in the June 2024 quarter.
Michelle Marquardt, ABS head of prices statistics, said, “Increases in living costs in the June 2024 quarter ranged from 1.2 per cent to 1.4 per cent, depending on the spending patterns of the different household types, compared to a rise of 1.0 per cent in the Consumer Price Index. This is the first time since December 2010 that increases in living costs for all household types were higher than the increase in the CPI.”
Insurance and financial services, including mortgage interest charges, along with food and non-alcoholic beverages, were the main contributors to the increased costs across all household types. Housing costs also rose for all except self-funded retirees.
Higher premiums for motor vehicle, house, and home contents insurance, as well as rising fruit and vegetable prices due to unfavorable growing conditions, impacted living costs for all household types. Other government transfer recipients, whose main source of income is government payments, recorded the largest rise.
“Other government transfer recipient households were most impacted by higher rental prices reflecting a tight rental market,” Ms. Marquardt noted.
A significant difference between the Living Cost Indexes (LCIs) and the CPI is that the LCIs include mortgage interest charges rather than the cost of building new dwellings. Employee households were most impacted by rising mortgage interest charges over the quarter, as these charges form a larger part of their spending compared to other household types.
“Mortgage interest charges rose 2.6 per cent in the June 2024 quarter driven by the continued rollover of some expired fixed rate mortgages to higher variable rate mortgages,” Marquardt said.
Annual living cost rises remain highest for employee households. “Employee households recorded the largest annual rise in living costs of all household types with a rise of 6.2 per cent. However, this was down from 6.5 per cent in the previous quarter, and down from the peak of 9.6 per cent in the June 2023 quarter,” Ms. Marquardt added.
“Mortgage interest charges rose 26.5 per cent annually, continuing the moderation seen since the peak of 91.6 per cent in the June 2023 quarter. This reflects fewer rises in the Reserve Bank of Australia’s cash rate in the last 12 months and a slowing in the rollover of expired fixed rate mortgages to higher variable rate mortgages,” she continued.
Higher insurance premiums, food, and housing costs over the last 12 months also contributed to annual living cost increases for all household types. The Pensioner and Beneficiary Living Cost Index (PBLCI), which measures living costs for age pensioner and other government transfer recipient households, rose 4.1 per cent over the year, compared to a rise of 3.8 per cent in the CPI.
“Age pensioner and other government transfer recipient households living costs include interest charges which rose between 20 and 24 per cent for these household types annually. Insurance also makes up a larger proportion of spending for these households compared to the CPI. Insurance premiums rose over the year contributing to higher living costs for these households,” Marquardt said.
“Government pensions are indexed on 20 September (and 20 March) by the greater of the rise in the PBLCI and CPI over a six-month period,” she concluded. Over the six months between the December 2023 quarter and June 2024 quarter, the PBLCI rose 2.6 per cent, while the CPI rose 2.0 per cent.
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